Pessimism Pays - Why Expecting the Worst Can Save You Money

What’s the first thing people tell you when you start feeling down in the dumps? “Don’t worry – things will get better!” But sometimes, being too positive is just a one-way street to being unprepared. Here are four common worries and why dwelling on them can help you save cash.

“What if I lose my job?” You’re right to worry. The economy is on shaky ground, and you could be fired or laid off due to any number of circumstances. Take it for granted that you’re going to leave your job eventually. This is a good time to set aside money for an emergency fund and put aside at least three month’s living expenses. Update your resume, C.V. or portfolio so that they’re current and they highlight your best work. Network with acquaintances and put your feelers out for similar jobs – even if you have no intention of leaving quite yet. Being ready is the best way to bounce back.

“What if I get into a horrible car accident?” No one wants to think about what would happen if they were hurt or killed in an accident – but you should. Make sure you have life and disability insurance. Write your will or establish a trust for your family and detail where all your assets should go. Establish who you’d like as your power of attorney if you ever end up in the hospital and unable to make your own decisions. Bad things happen to people of all ages. Being young is no excuse for not being prepared for an emergency.

“What if my future spouse leaves me?”How about a prenuptial agreement? Oh, I know what you’re thinking. But really, wouldn’t you rather protect your best interests – and your future spouse’s – while you’re in a loving state of mind? Should you end up divorced, you don’t want to spend so much time fighting over a couch that the cost of legal fees could’ve easily bought you another one. Best case scenario, you never use the prenuptial agreement. Worst case scenario, it’s a lot less to worry about if your marriage goes down the drain.

“What if my house burns down?”If you bought your house with a mortgage, you were required to purchase homeowners insurance, which covers things like damage from fire, lightening, hail and storms. But if you’re a renter, there’s a good chance you may not have insurance. When you rent, the building is insured by your landlord or property management company. If there’s a fire, your landlord is only responsible for the building, not any personal property you lose. A basic renter’s insurance plan replaces personal property and can cost you as little as $10 a month through any insurance agent, such as AAA or Geico.

So tell me, what are your financial worries and how do you prepare for them?

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Guest #1

Awhile back, I was in a car accident and without my car for almost a month. It was a real pain in the *ss since my city has terrible public transportation and I depended on the insurance company for a rental and friends.

After I got it back, I realized I would have been totally screwed if it had been totaled. So after I finished paying if off, I continued to put about half of what would have been my monthly payments into my savings account.

One of my kids has been diagnosed with a handful of things. My other child is too young yet, but it wouldn't surprise me to see she has some of the same issues too.

I want to establish suitable guardians for them, just in case - but I'm having a hard time doing so. Perhaps I'm too picky, but I don't want either of them pushed into a situation where they're not understood and valued for who they are, at a time when everything in their world has been turned upside down.

I'm really afraid that my only option is to live forever - and while I'd love to do that, it isn't entirely up to me. :P I'm completely lost here, and hope that a solution becomes available.

Sylrayj - That is a hard decision to have to make. The best I can say is that kids are tougher than you think, especially in difficult situations. Think of all the people who have come from terrible backgrounds to achieve wonderful things. If Oprah can overcome, there's hope for all kids. I hope that can bring you a little bit of comfort when taking steps to establish guardians for your kids. Find someone to care for them, and your kids will grow into the people they were meant to be. It's smart of you to think about these things now, and hopefully, you'll never need to use these safeguards.

I think worrying is unhealthy and can take you on a downward spiral into anxiety, depression, unnecesary fear. There's a reason the Bible tells us not to worry. However, thinking of things and preparing for the unknown is great. Isn't there a difference? Can't there be balance here? Tomorrow may not come, so don't worry about what tomorrow could bring...but be prepared!